Recent statistics have revealed that 57% of Germans prefer using credit and debit cards more than any other method of payment. So if you thought that businesses outside of the country would benefit most from a merchant account Germany is no different.
The upward trend of debit and credit card usage just goes to prove that now more than ever, businesses should seriously consider setting up a merchant account in Germany. Offering a way to accept and process payments issued by credit or debit card, German merchant accounts are nothing short of a necessity.
So what exactly is a German merchant account and how can it benefit you? Well, simply put, a merchant account in Germany is what allows business owners to accept electronic payments. These accounts are established strictly for businesses and are funded only through payments received.
The account is held by a merchant acquiring bank that stands as the liaison between your buyers and the card issuer. Here’s how the process takes place:
Although it might seem like a lengthy process, all of the steps (save for the disbursal) should take just a few seconds. And once it’s complete, both you and your buyer instantly receive confirmation. So if they’re buying in-store, that means they can walk out with their newly purchased products. Or if they’re buying online, that means you can get started on packing and shipping out their order.
There are two main charges you should be interested in when you’re setting up your merchant account in Germany. The first is the cost of the rates per transaction. Your acquirer will deduct a certain amount from every successful transaction that you complete using your merchant account in Germany.
The rates are different from contract to contract, and banks will typically measure the rates for your business depending on different factors. But according to experts, you should expect the charge to fall between 0.5% and 5.0% of the total transaction cost.
That means that your acquirer will take out up to 5% of the amount that your buyers pay. Keep in mind that this is baked into their payment. So if you bill them a grand total of US$100, they won’t pay US$105. Instead, your acquirer will take the amount out of the amount that the buyers are told to pay.
Most businesses don’t like this, especially if the rates are too high. So to offset the added charge, some business owners impose a processing fee on electronic payments to cover the acquirer’s charges at the expense of the buyer.
But aside from the rates that they charge per transaction, acquirers will also charge a penalty for chargebacks. Now, what exactly is that? A chargeback is essentially what happens when a buyer decides to ask for a refund. Whatever the reason for the buyer’s refund request, the acquirer will charge you a penalty.
No one wants to reverse a perfectly good payment, and banks incur penalties themselves for having to execute refunds. So to make up for their losses, your merchant acquiring bank will charge at least US$20 or up to US$100 for every chargeback request that you get.
Keep in mind that you can’t impose this fee on your buyers the same way you would the processing fees because your objective is to return money to your consumer. That means the chargeback penalty is all on you.
Since we’re on the topic of chargebacks, it’s important to talk about high-risk merchant accounts in Germany. These are essential merchants that are at a higher risk of experiencing chargebacks. Banks determine which clients are potentially high risk, and then make decisions on contracts depending on the information they collect.
Unfortunately, though, banks will actively avoid partnering up with high-risk merchants because they don’t want to incur the liability. So high-risk merchants are likely to be met with constant rejection after each application for a merchant account in Germany.
But what exactly designates a merchant account in Germany as high risk? Here are some factors that might not be too favorable for banks:
If most of the items on this list apply to your business, then you might be more likely to face rejection. Banks are careful and cautious when it comes to dealing anywhere where there’s risk involved. So it’s no surprise that they might reject your application if they see that you meet most of the qualities listed here.
In fact, most banks will reject applications from moderate risk merchants in Germany. If they ever do decide to approve the application, they’re likely to max out the penalties and fees per transaction and for chargebacks.
It can be frustrating to constantly have to deal with rejection whenever you try to apply for a high-risk merchant account in Germany. Sometimes, it might be because you have insufficient documents. Or maybe because you’re dealing with the wrong banks. But if you’re a German high-risk merchant account, the reason is likely to be your risk rating.
If that’s the case, then approval can be almost impossible to come by without the help of a merchant account specialist — and that’s precisely what Shark Processing is. We provide assistance for businesses who want to open up high-risk merchant accounts in Germany.
We cooperate with a long list of international banking partners who freely align themselves with hard-to-place merchants. Thus we make it our goal to level the playing field and give all businesses a fair, fighting chance at keeping up with the trends and the competition.
You’ve probably had to jump through countless hoops to get your application through the doors of various banks, only to be met with disapproval. But here at Shark Processing, we keep things simple.
With no need for long waits, extensive forms, and countless documents, we provide streamlined solutions that are developed to ease your application and get you approval minus all the tedious steps.
At Shark Processing, we’re interested in creating lasting relationships. It’s our goal to give you tailored solutions that actually put the interest of your business front and center. Get placed with a bank that’s right for your business, and enjoy electronic payments in Germany that benefit both you and your consumer base.
Forget the long waits, the unanswered emails, and the constant rejection — Shark Processing is here to turn things around. Contact us today to find out how we can help you open your high-risk merchant account in Germany, or move through to the first step of the process by filling out our pre-application form.
Keep your lines open and wait for our friendly personnel to give you a call. And get ready to enjoy the convenience and benefits of electronic payments in 24 hours — or less!